Coffee Market Price Today Climbs as Dollar Weakness and Supply Dynamics Reshape Outlook

The coffee market price today reflects a complex interplay of currency movements, production forecasts, and inventory shifts that traders must navigate carefully. Recent trading sessions witnessed arabica coffee rising +0.92% while robusta gained +2.88%, signaling renewed buying interest across both varieties of the world’s most consumed beverage commodity.

Dollar Decline Triggers Technical Rebound in Coffee Prices

The primary catalyst for this week’s coffee market price surge stems from broad dollar weakness, as the dollar index fell to its lowest level in 3.5 months. This currency retreat prompted widespread short covering across commodity markets, allowing traders with bearish coffee positions to buy back contracts and lock in profits. When the dollar weakens, dollar-denominated commodities like coffee become cheaper for foreign buyers, theoretically boosting demand and supporting prices.

Brazil’s Production Surge Poses Long-Term Challenge for Coffee Market

Brazil, accounting for roughly one-third of global arabica supply, presents a mixed picture for the coffee market price outlook. Brazilian officials have raised their 2025 production forecast to 56.54 million bags, representing a 2.4% increase from previous estimates. However, the world’s largest arabica-growing region, Minas Gerais, experienced below-average rainfall this month, receiving only 53% of typical precipitation levels. While drought concerns initially supported coffee prices, Conab’s bullish production revision suggests adequate supplies will likely materialize, potentially capping upside for the coffee market price trajectory.

Vietnam’s Production Boom Weighs Heavily on Robusta Coffee Market

Vietnam, the world’s dominant robusta producer, threatens to inundate global coffee markets with record supplies. The country’s 2025 coffee exports surged 17.5% year-over-year to 1.58 million metric tons, and production is projected to climb 6% to 1.76 million metric tons, marking a 4-year high. This production expansion directly pressures coffee market price, particularly for robusta contracts which face the most significant supply headwinds. The Vietnam Coffee and Cocoa Association indicated that 2025/26 output could exceed the prior year by 10% if weather remains favorable.

Inventory Recovery Signals Ample Coffee Market Supply Ahead

Exchange-monitored coffee stockpiles have rebounded from multi-month lows, a bearish development for the coffee market price. Arabica inventories recovered to 461,829 bags last week from their 1.75-year low of 398,645 bags set in November. Similarly, robusta inventories climbed to 4,609 lots from their 1-year low of 4,012 lots recorded in early December. These inventory gains suggest adequate supplies are becoming available, weighing against sustained coffee market price appreciation.

Global Production Records Forecast Bearish Pressure on Coffee Prices

The USDA’s Foreign Agriculture Service painted a bullish supply picture in its recent forecast, projecting world coffee production in 2025/26 will reach a record 178.848 million bags, rising 2.0% year-over-year. While arabica production faces a 4.7% decline to 95.515 million bags, robusta output is expected to jump 10.9% to 83.333 million bags, offsetting arabica weakness. The agency forecasted Brazil’s harvest at 63 million bags (down 3.1% annually) while Vietnam’s output will reach 30.8 million bags, a 4-year high. Ending stocks are projected to fall modestly to 20.148 million bags, a 5.4% decline from 21.307 million bags in 2024/25. This ample production backdrop suggests the coffee market price rally faces structural resistance, with supply potentially outpacing demand growth throughout the marketing year.